What’s Bankrupting the Country?

What’s Bankrupting the Country?

Spending $102 Billion a Year on 800 Worldwide Military Bases

As long as politicians get to decide how to spend public revenue, and as long as Americans dont have to pay for war in real time but let their grandkids cover the cost, the profligacy will go on until America is ruined — unless, of course, we geonomize first. This 2009 article is from Tomdispatch.com, posted on AlterNet July 3.

By Chalmers Johnson

The following is an introduction from Tom Engelhardt: An embassy complex to be built in Islamabad, Pakistan — if you assume the normal cost overruns on such projects — is likely to be close to a billion dollars.

The embassy story was broken at the end of May by McClatchy News (in this case, Warren P. Stroebel and Saeed Shah). They reported that an appropriation of $736 million for embassy construction had quietly made its way through both houses of Congress. Does such an imperial monstrosity indicate a longer-term commitment to a wider war in the Af-Pak (as in Afghanistan-Pakistan) theater?

Maybe in a world where near-trillion-dollar bailouts are the norm, a mere three-quarters of a billion for a fortress of an embassy seems like so much chump change. Fortunately, Chalmers Johnson, author of The Blowback Trilogy, and an expert on U.S. military bases abroad, did notice and brings it to our attention.

The U.S. Empire of Bases — at $102 billion a year already the world’s costliest military enterprise — just got a good deal more expensive. The State Department will build a new “embassy” in Islamabad, Pakistan, which at $736 million will be the second priciest ever constructed, only $4 million less, if cost overruns don’t occur, than the Vatican-City-sized one the Bush administration put up in Baghdad. The State Department was also reportedly planning to buy the five-star Pearl Continental Hotel (complete with pool) in Peshawar, near the border with Afghanistan, to use as a consulate and living quarters for its staff there.

Unfortunately for such plans, on June 9th Pakistani militants rammed a truck filled with explosives into the hotel, killing 18 occupants, wounding at least 55, and collapsing one entire wing of the structure. There has been no news since about whether the State Department is still going ahead with the purchase.

Whatever the costs turn out to be, they will not be included in our already bloated military budget, even though none of these structures is designed to be a true embassy — a place, that is, where local people come for visas and American officials represent the commercial and diplomatic interests of their country. Instead these so-called embassies will actually be walled compounds, akin to medieval fortresses, where American spies, soldiers, intelligence officials, and diplomats try to keep an eye on hostile populations in a region at war. One can predict with certainty that they will house a large contingent of Marines and include rooftop helicopter pads for quick get-aways.

It must be obvious to people in those countries that this is part of an in-your-face American imperial presence. We shouldn’t be surprised when militants attacking the U.S. find one of our base-like embassies, however heavily guarded, an easier target than a large military base.

Even as Congress and the Obama administration wrangle over the cost of bank bailouts, a new health plan, pollution controls, etc, no one suggests that closing some of these unpopular, expensive military bases anyway — now close to 800 of them dotted across the globe in other people’s countries — might be a good way to save some money.

Instead, they are evidently about to become even more expensive. For instance, Kyrgyzstan has more than tripled ground rent from $17.4 million to $60 million for US military use of its capitol city airport.

Might other nations follow suit? The Ecuadorians have told us to leave Manta Air Base by this November; they could probably use a spot more money. The Japanese reached a deal with Washington to move some American Marines from bases on Okinawa to the U.S. territory of Guam. In the process, however, they were forced to shell out not only for the cost of the Marines’ removal, but also to build new facilities on Guam for their arrival. Might they just tell the Americans to get out and pay for it themselves?

In fact, I have a suggestion for other countries that are getting a bit weary of the American military presence on their soil: cash in now, before it’s too late. I’m convinced that the U.S. Empire of Bases will soon enough bankrupt our country. It’s better to get your money out while you still can.

This is, of course, something that has occurred to the Chinese and other financiers of the American national debt. Only they’re cashing in quietly and slowly in order not to tank the dollar while they’re still holding onto such a bundle of them. Make no mistake, though: whether we’re being bled rapidly or slowly, we are bleeding; and hanging onto our military empire and all the bases that go with it will ultimately spell the end of the United States as we know it.

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Arts & Letters

Geonomics is …

close to the policy of the Garden Cities in England. Founded by Ebenezer Howard over a century ago, residents own the land in common and run the town as a business. Letchworth, the oldest of the model towns, serves residents grandly from bucketfuls of collected land rent (as does the Canadian Province of Alberta from oil royalty). A geonomic town would pay the rent to residents, letting them freely choose personalized services, and also ax taxes. Both geonomics and Howard were inspired by American proto-geonomist Henry George. The movement launched by Howard today in the UK advances the shift of taxes from buildings to locations. A recent report from the Town and Country Planning Association proposes this Property Tax Shift and their journal published research in the potential of land value taxation by Tony Vickers (Vol. 69, Part 5, 2000). (Thanks to James Robertson)

an answer for Jonathan of the Green Party (Nov 7): “What does ‘share our surplus’ mean?”
Our surplus is the values that society generates synergistically. It’s the money we spend on the nature we use: on land sites, natural resources, EM spectrum, ecosystem services (assimilating pollutants). It’s also the money we pay to holders of government-granted privileges like corporate charters. We could share it by paying for the nature we use and privileges we hold to the public treasury then getting back a fair share of the recovered revenue. Used to be, owners did owe rent (“own” and “owe” used to be one word). And presently, some lucky residents do get back periodic dividends: Alaska’s oil dividend and Aspen Colorado’s housing assistance. Doing that, instead of subsidizing bads while taxing goods, is the essence of geonomics.
Jonathan: “Is local currency what you mean?”Editor: It’s not. Community currency is a good reform, but every good reform pushes up site values. That makes land an even more tempting object of speculation. Now, any good will eventually do bad by widening the income gap – until you share land values.

a study of a phenomenon David Ricardo noted going on two centuries ago. When wine grapes rise to $10,000 a ton from the very best land (last year, cabernet sauvignon commanded an average of $4,021 a ton in the Napa Valley), then vineyard prices soar from $18,000 an acre in the 1980′s to $100,000 an acre five years ago and now for a top pedigree up to $300,000 an acre (The New York Times, April 9, via Wyn Achenbaum). Pricey land does not make wine pricey; spendy wine makes land spendy. While vintners make their wine tasty, nature and society in general – not any lone owner – make land desireable. Steve Kerch of CBS’s MarketWatch (April 5) notes that much of what a home sells for on the open market is a reflection of intangible factors such as what school district the house sits in. The price the builder has to pay for the land also tends to be driven by the same intangibles. Because the value of land comes from society, and because one’s use excludes the rest of society, each user owes all others compensation, and is owed compensation by everyone else. Sharing land’s value, instead of taxing one’s efforts, is the policy of geonomics.

not a panacea, but like John Muir said, “pull on any one thing, and find it connected to everything else.” Recall last month’s earthquake in El Salvador. We felt it and its formidable after-shocks in Nicaragua. Immediately afterwards, my host nation, one of the poorest in the Western Hemisphere, sent aid to its Central American neighbor. The Nica newspapers carried photos of the devastation. They showed that the cliff sides that crumbled had had homes built on them while the cliffs left pristine withstood the shock. Could monopoly of good, safe, flat land be pushing people to build on risky, unstable cliffs? If so, that’s just one more good reason to break up land monopoly. What works to break up land monopoly, history shows, is for society to collect the annual rental value of the underlying sites and resources. That’d spur owners to use level land efficiently, so no one would be excluded, forced to resort to cliffs. To prevent another man-induced landslide is yet another reason to spread geonomics.

a new policy from a new perspective. Once your worldview shifts — so that vacant city lots are no longer invisible — then epiphany. “Of course! Why didn’t I see it before?” Once you do see the emptiness and what damage it does, how can you ever go back to the old paradigm?

a POV that Spain’s president might try. A few blocks from my room in Madrid at a book fair to promote literacy, Sr Zapatero, while giving autographs and high fives to kids, said books are very expensive and he’d see about getting the value added tax on them cut down to zero. (El Pais, June 4; see, politicians can grasp geo-logic.) But why do we raise the cost of any useful product? Why not tax useless products? Even more basic: is being better than a costly tax good enough? Our favorite replacement for any tax is no tax: instead, run government like a business and charge full market value for the permits it issues, such as everything from corporate charters to emission allowances to resource leases. These pieces of paper are immensely valuable, yet now our steward, the state, gives them away for nearly free, absolutely free in some cases. Government is sitting on its own assets and needs merely to cash in by doing what any rational entity in the economy does – negotiate the best deal. Then with this profit, rather than fund more waste, pay the stakeholders, we citizenry, a dividend. Thereby geonomics gets rid of two huge problems. It replaces taxes with full-value fees and replaces subsidies for special interests with a Citizens Dividend for people in general. Neither left nor right, this reform is what both nature lovers and liberty lovers need to promote, right now.

the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.

a discipline that, compared to economics, is as obscure as Warren Buffett’s investment strategy, compared to conventional investment theory, about which Buffett said, “You couldn’t advance in a finance department in this country unless you taught that the world was flat.” (The New York Times, Oct 29). The writer wondered, “But why? If it works, why don’t more investors use it?”
Good question. Geonomics works, too. Every place that has used it has prospered while conserving resources. Yet it remains off the radar of many wanna-be reformers. Gradually, tho’, that’s changing. More are becoming aware of what geonomics studies – all the money we spend on the nature we use. Geonomics (1) as an alternative worldview to the anthropocentric, sees human economies as part of the embracing ecosystem with natural feedback loops seeking balance in both systems. (2) As an alternative to worker vs. investor, it sees our need for sites and resources making those who own land into landlords. (3)As an alternative to economics, it tracks the trillions of “rent” as it drives the “housing” bubble and all other indicators. And (4) as an alternative to left or right, it suggests we not tax ourselves then subsidize our favorites but recover and share society’s surplus, paying in land dues and getting back “rent” dividends, a la Alaska’s oil dividend. Letting rent go to the wrong pockets wreaks havoc, while redirecting it to everyone would solve our economic ills and the ills downstream from them.
People must learn to stop whining so much and feel enough self-esteem to demand a fair share of rent, society’s surplus, the commonwealth.

a manual. The world did not come without a way for people to prosper, and the planet to heal and stay well; that way is geonomics. Economies are part of the ecosystem. Both generate surpluses and follow self-regulating feedback loops. A cycle like the Law of Supply and Demand is one of the economy’s on/off loops. Our spending for land and resources – things that nobody made and everybody needs – constitutes our society’s surplus. Those profits without production (remember, nobody produced Earth) can become our commonwealth. To share it, we could pay land dues in to the public treasury (wouldn’t oil companies love that?) and get rent dividends back, a la Alaska’s oil dividend. Doing so let’s us axe taxes and jettison subsidies. Taxes and subsidies distort price (the DNA of exchange), violate quid pro quo by benefiting the well-connected more than anyone else, reinforce hierarchy of state over citizen, and are costly to administer (you don’t really need so much bureaucracy, do you?). Conversely, land dues motivate people to not waste sites, resources, and the ecosystem while rent dividends motivate people to not waste themselves. Receiving this income supplement – a Citizens Dividend – people can invest in their favorite technology or outgrow being “economan” and shrink their overbearing workweek in order to enjoy more time with family, friends, community, and nature. Then in all that free time, maybe we could figure out just what we are here for.

the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.

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Thoughts for the Day

I never considered a difference of opinion in politics, in religion, in philosophy, as cause for withdrawing from a friend.

Thomas Jefferson

Courage is doing what you’re afraid to do. There can be no courage unless you’re scared.

Eddie Rickenbacker

To prevent government from becoming corrupt and tyrannous, its organization and methods should be as simple as possible, its functions be restricted to those necessary to the common welfare, and in all its parts it should be kept as close to the people and as directly within their control as may be.

Henry George

Life is an adventure in forgiveness.

Norman Cousins

Good questions outrank easy answers.

Paul Samuelson

Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much higher consideration.